Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2021 | Aug. 16, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 001-39338 | |
Entity Registrant Name | NUZEE, INC. | |
Entity Central Index Key | 0001527613 | |
Entity Tax Identification Number | 38-3849791 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1 401 Capital Avenue | |
Entity Address, Address Line Two | Suite B | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75074 | |
City Area Code | 760 | |
Local Phone Number | 295-2408 | |
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | NUZE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,820,390 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 12,704,257 | $ 4,398,545 |
Accounts receivable, net | 320,030 | 195,610 |
Inventories, net | 428,856 | 245,370 |
Prepaid expenses and other current assets | 321,651 | 645,375 |
Total current assets | 13,774,794 | 5,484,900 |
Property and equipment, net | 807,848 | 1,668,348 |
Other assets: | ||
Right-of-use asset - operating lease | 449,250 | 652,197 |
Right-of-use asset - finance lease | 105,825 | |
Investments | 179,238 | 183,314 |
Other assets | 81,921 | 80,559 |
Total other assets | 710,409 | 1,021,895 |
Total assets | 15,293,051 | 8,175,143 |
Current liabilities: | ||
Accounts payable | 81,318 | 49,778 |
Current portion of long-term loan payable | 57,920 | 56,072 |
Current portion of lease liability - operating lease | 162,674 | 263,678 |
Current portion of lease liability - finance lease | 26,964 | 21,598 |
Accrued expenses | 202,147 | 703,069 |
Deferred income | 95,032 | 34,000 |
Other current liabilities | 255,198 | 104,525 |
Total current liabilities | 881,253 | 1,232,720 |
Non-current liabilities: | ||
Lease liability - operating lease, net of current portion | 303,599 | 395,713 |
Lease liability - finance lease, net of current portion | 57,095 | 78,400 |
Loan payable - long term, net of current portion | 14,590 | 56,845 |
Other noncurrent liabilities | 22,435 | 21,707 |
Total noncurrent liabilities | 397,719 | 552,665 |
Total liabilities | 1,278,972 | 1,785,385 |
Stockholders’ equity: | ||
Common stock; 100,000,000 shares authorized, $0.00001 par value; 17,820,390 and 14,570,105 shares issued | 178 | 146 |
Additional paid in capital | 63,147,614 | 40,472,229 |
Accumulated deficit | (49,321,500) | (34,272,778) |
Accumulated other comprehensive income | 187,787 | 190,161 |
Total stockholders’ equity | 14,014,079 | 6,389,758 |
Total liabilities and stockholders’ equity | $ 15,293,051 | $ 8,175,143 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 17,820,390 | 14,570,105 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 510,032 | $ 191,962 | $ 1,442,083 | $ 1,131,562 |
Cost of sales | 413,446 | 331,039 | 1,352,843 | 1,250,904 |
Gross Profit (Loss) | 96,586 | (139,077) | 89,240 | (119,342) |
Operating expenses | 3,206,552 | 2,378,947 | 15,222,137 | 8,342,412 |
Loss from operations | (3,109,966) | (2,518,024) | (15,132,897) | (8,461,754) |
Loss from investment in uncosolidated affiliate | (102) | (4,077) | ||
Other income | 47,909 | 25,523 | 101,623 | 28,504 |
Other expense | (1,280) | (42,113) | (2,093) | (44,712) |
Interest expense | (3,603) | (6,448) | (11,278) | (16,573) |
Net loss | (3,067,042) | (2,541,062) | (15,048,722) | (8,494,535) |
Net income (loss) attributable to noncontrolling interest | 1,356 | (40,634) | ||
Net loss attributable to NuZee, Inc. | $ (3,067,042) | $ (2,542,418) | $ (15,048,722) | $ (8,453,901) |
Basic and diluted loss per common share | $ (0.17) | $ (0.18) | $ (0.94) | $ (0.62) |
Basic and diluted weighted average number of common stock outstanding | 17,820,390 | 13,782,950 | 15,938,931 | 13,724,590 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net loss | $ (3,067,042) | $ (2,541,062) | $ (15,048,722) | $ (8,494,535) |
Foreign currency translation | (7,854) | 10,739 | (2,374) | 21,858 |
Total other comprehensive income (loss), net of tax | (7,854) | 10,739 | (2,374) | 21,858 |
Comprehensive income (loss) | (3,074,896) | (2,530,323) | (15,051,096) | (8,472,677) |
Parent [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net loss | (3,067,042) | (2,542,418) | (15,048,722) | (8,453,901) |
Foreign currency translation | (7,854) | 10,209 | (2,374) | (59,510) |
Total other comprehensive income (loss), net of tax | (7,854) | 10,209 | (2,374) | (59,510) |
Comprehensive income (loss) | (3,074,896) | (2,532,209) | (15,051,096) | (8,513,411) |
Noncontrolling Interest [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net loss | 1,356 | (40,634) | ||
Foreign currency translation | 530 | 81,368 | ||
Total other comprehensive income (loss), net of tax | 530 | 81,368 | ||
Comprehensive income (loss) | $ 1,886 | $ 40,734 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total | Noncontrolling Interest [Member] |
Beginning balance, value at Sep. 30, 2019 | $ 137 | $ 28,898,344 | $ (24,795,687) | $ (90,635) | $ 4,115,062 | $ 102,903 |
Beginning balance, shares at Sep. 30, 2019 | 13,617,366 | |||||
Equity securities issued for cash | $ 1 | 1,994,522 | 1,994,523 | |||
Equity securities issued for cash, shares | 111,738 | |||||
Stock option expense | 2,220,861 | 2,220,861 | ||||
Other comprehensive gain | 27,230 | 32,872 | 5,642 | |||
Net income (loss) | (3,421,232) | (3,432,253) | (11,021) | |||
Ending balance, value at Dec. 31, 2019 | $ 138 | 33,113,727 | (28,216,919) | (63,405) | 4,931,065 | 97,524 |
Ending balance, shares at Dec. 31, 2019 | 13,729,104 | |||||
Beginning balance, value at Sep. 30, 2019 | $ 137 | 28,898,344 | (24,795,687) | (90,635) | 4,115,062 | 102,903 |
Beginning balance, shares at Sep. 30, 2019 | 13,617,366 | |||||
Other comprehensive gain | 21,858 | 81,368 | ||||
Net income (loss) | (8,494,535) | (40,634) | ||||
Ending balance, value at Jun. 30, 2020 | $ 145 | 40,046,531 | (33,249,588) | (150,145) | 6,790,580 | 143,637 |
Ending balance, shares at Jun. 30, 2020 | 14,429,104 | |||||
Beginning balance, value at Dec. 31, 2019 | $ 138 | 33,113,727 | (28,216,919) | (63,405) | 4,931,065 | 97,524 |
Beginning balance, shares at Dec. 31, 2019 | 13,729,104 | |||||
Stock option expense | 962,490 | 962,490 | ||||
Other comprehensive gain | (96,949) | (21,753) | 75,196 | |||
Net income (loss) | (2,490,251) | (2,521,220) | (30,969) | |||
Ending balance, value at Mar. 31, 2020 | $ 138 | 34,076,217 | (30,707,170) | (160,354) | 3,350,582 | 141,751 |
Ending balance, shares at Mar. 31, 2020 | 13,729,104 | |||||
Equity securities issued for cash | $ 7 | 4,648,167 | 4,648,174 | |||
Equity securities issued for cash, shares | 700,000 | |||||
Stock option expense | 1,322,147 | 1,322,147 | ||||
Other comprehensive gain | 10,209 | 10,739 | 530 | |||
Net income (loss) | (2,542,418) | (2,541,062) | 1,356 | |||
Ending balance, value at Jun. 30, 2020 | $ 145 | 40,046,531 | (33,249,588) | (150,145) | 6,790,580 | 143,637 |
Ending balance, shares at Jun. 30, 2020 | 14,429,104 | |||||
Beginning balance, value at Sep. 30, 2020 | $ 146 | 40,472,229 | (34,272,778) | 190,161 | 6,389,758 | |
Beginning balance, shares at Sep. 30, 2020 | 14,570,105 | |||||
Equity securities issued for cash | $ 3 | 2,683,977 | 2,683,980 | |||
Equity securities issued for cash, shares | 324,959 | |||||
Stock option expense | 4,507,298 | 4,507,298 | ||||
Exercise of stock options | 9,180 | 9,180 | ||||
Exercise of stock options, shares | 6,000 | |||||
Other comprehensive gain | 1,656 | 1,656 | ||||
Net income (loss) | (5,896,072) | (5,896,072) | ||||
Ending balance, value at Dec. 31, 2020 | $ 149 | 47,672,684 | (40,168,850) | 191,817 | 7,695,800 | |
Ending balance, shares at Dec. 31, 2020 | 14,901,064 | |||||
Beginning balance, value at Sep. 30, 2020 | $ 146 | 40,472,229 | (34,272,778) | 190,161 | $ 6,389,758 | |
Beginning balance, shares at Sep. 30, 2020 | 14,570,105 | |||||
Equity securities issued for cash, shares | 256,338 | |||||
Exercise of stock options, shares | 6,000 | |||||
Other comprehensive gain | $ (2,374) | |||||
Net income (loss) | (15,048,722) | |||||
Ending balance, value at Jun. 30, 2021 | $ 178 | 63,147,614 | (49,321,500) | 187,787 | 14,014,079 | |
Ending balance, shares at Jun. 30, 2021 | 17,820,390 | |||||
Beginning balance, value at Dec. 31, 2020 | $ 149 | 47,672,684 | (40,168,850) | 191,817 | 7,695,800 | |
Beginning balance, shares at Dec. 31, 2020 | 14,901,064 | |||||
Equity securities issued for cash | $ 28 | 11,017,276 | 11,017,304 | |||
Equity securities issued for cash, shares | 2,782,111 | |||||
Common stock issued for compensation | $ 1 | 870,999 | 871,000 | |||
Common stock issued for compensation, shares | 137,215 | |||||
Stock option expense | 1,989,006 | 1,989,006 | ||||
Other comprehensive gain | 3,824 | 3,824 | ||||
Net income (loss) | (6,085,608) | (6,085,608) | ||||
Ending balance, value at Mar. 31, 2021 | $ 178 | 61,549,965 | (46,254,458) | 195,641 | 15,491,326 | |
Ending balance, shares at Mar. 31, 2021 | 17,820,390 | |||||
Amortization of common stock issued for compensation | 91,036 | 91,036 | ||||
Stock option expense | 1,506,613 | 1,506,613 | ||||
Other comprehensive gain | (7,854) | (7,854) | ||||
Net income (loss) | (3,067,042) | (3,067,042) | ||||
Ending balance, value at Jun. 30, 2021 | $ 178 | $ 63,147,614 | $ (49,321,500) | $ 187,787 | $ 14,014,079 | |
Ending balance, shares at Jun. 30, 2021 | 17,820,390 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities: | ||
Net loss | $ (15,048,722) | $ (8,494,535) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and Amortization | 254,929 | 310,393 |
Noncash lease expense | 215,397 | 101,505 |
Stock option expense | 8,002,917 | 4,505,498 |
Property and equipment impairment | 840,391 | |
Inventory impairment | 74,944 | |
Common stock issued for compensation | 962,036 | |
Sales allowance | (11,562) | 3,835 |
Write-off of deferred offering costs | 477,605 | |
Loss on sale of assets | 43,012 | |
Loss from investment in uncosolidated afffiliate | 4,076 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (112,858) | 469,020 |
Accounts receivable - Related party | (118) | |
Inventories | (183,486) | 151,067 |
Prepaid expense and other current assets | (141,018) | (122,426) |
Other current assets - Related party | 460 | |
Other assets | (1,362) | (41,767) |
Accounts payable | 31,540 | (199,763) |
Other non-current liabilities | 728 | 7,144 |
Deferred revenue | 61,032 | |
Operating lease liabilities | (193,118) | (83,063) |
Other current liabilities | 150,673 | |
Other current liabilities - related party | (704) | |
Accrued expense and other current liabilities | (513,785) | 271,784 |
Net cash used in operating activities | (5,204,587) | (3,003,714) |
Investing activities: | ||
Cash paid for purchase of fixed assets, net | (141,445) | (16,306) |
Proceeds from sales of equipment | 110,000 | |
Net cash provided by (used in) investing activities | (141,445) | 93,694 |
Financing activities: | ||
Proceeds from exercise of options | 9,180 | |
Repayment of loans | (40,407) | (75,816) |
Repayment of finance lease | (15,939) | (14,039) |
Proceeds from issuance of equity securities, net of issuance costs | 13,701,284 | 6,867,786 |
Net cash provided by financing activities | 13,654,118 | 6,777,931 |
Effect of foreign exchange on cash and cash equivalents | (2,374) | 21,858 |
Net change in cash | 8,305,712 | 3,889,769 |
Cash, beginning of period | 4,398,545 | 1,326,040 |
Cash, end of period | 12,704,257 | 5,215,809 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 11,278 | 16,573 |
Cash paid for taxes | 7,044 | 800 |
Non-cash transactions | ||
Recognition of right-of-use asset and lease liability upon adoption of ASU 2016-02 | 517,263 | |
Recognition of right-of-use asset and lease liability during the period | 217,674 | |
Reclassification of common stock offering costs to additional paid in capital | 1,150,989 | |
Finance lease of equipment to pay off accounts payable | 124,500 | |
Contribution of machines to NuZee Latin America | $ 160,000 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim consolidated financial statements of NuZee, Inc. (together with its subsidiaries, referred to herein as the “Company”, “we” or “NuZee”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2020 as filed with the SEC on December 28, 2020. In the opinion of management, all adjustments, consisting of recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the annual report on Form 10-K have been omitted. Principles of Consolidation The Company prepares its financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its former majority owned subsidiary (which was sold as of September 28, 2020, as described below), which has a fiscal year end of September 30. All significant intercompany accounts, balances and transactions have been eliminated upon consolidation. On September 28, 2020, the Company entered into a Stock Transfer Agreement with Eguchi Holdings Co., Ltd. (“EHCL”), pursuant to which the Company sold to EHCL for an aggregate sale price of approximately $ 34,000 70 The Company has two wholly owned international subsidiaries in NuZee KOREA Ltd. (“NuZee KR”) and NuZee Investment Co., Ltd. (“NuZee INV”). Stock Split On October 28, 2019, we completed a l-for-3 reverse stock split Earnings per Share Basic earnings per common share is equal to net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of June 30, 2021 and June 30, 2020, the total number of common stock equivalents was 8,289,864 1,725,000 Capital Resources Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of June 30, 2021, the Company had cash of $ 12,704,257 Major Customers In the nine months ended June 30, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Nine months ended June 30, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Customer WP $ 456,247 32 % $ 124,814 39 % Nine months ended June 30, 2020: C ustomer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer K $ 284,099 25 % $ - 0 % Customer WP $ 259,925 23 % $ 7,767 11 % Customer J $ 188,574 17 % $ 175 0 % Lease In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The Company implemented ASU No. 2016-02 on October 1, 2019. The Company does a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. The Company has one significant long-term operating lease for office and manufacturing space in Plano, Texas. The leased property in Plano, Texas, has a remaining lease term through June of 2024. The lease has an option to extend beyond the stated termination date, but exercise of this option is not probable. The Company did not apply the recognition requirements of ASC 842 to operating leases with a remaining lease term of 12 months The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2020, through the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases are as follows: SCHEDULE OF ROU ASSETS AND LEASE LIABILITY October 1, 2020 ROU Asset $ 652,197 Lease Liability $ 659,391 During the prior year analysis of leases, we determined to renew the office and manufacturing space in Vista, CA through January 31, 2022, which was previously scheduled to be vacated at June 30, 2020. Additionally, the Korean office and manufacturing space lease was extended through June 2022 and an apartment lease was signed through June 2022. Accordingly, we have added ROU assets and lease liabilities related to those leases at June 30, 2020. The direct-leased property in Vista, California has a remaining lease term through January of 2022. The leased properties in both Korea and Vista, California have options to extend beyond the stated termination date, but exercise of these options are not probable. The sub-leased property in Vista, California, is leased month-to-month and has been calculated as a ROU Asset co-terminus with the direct-leased property. In September 2020, we entered into an 18 Effective September 1, 2020, we converted our month-to-month sublease in Vista, California to a 17 17 As of June 30, 2021, our operating leases had a weighted average remaining lease term of 1.9 SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2020 $ 652,197 Amortization during the period (202,947 ) ROU Asset –June 30, 2021 $ 449,250 Lease Liability – October 1, 2020 $ 659,391 Amortization during the period (193,118 ) Lease Liability – June 30, 2021 $ 466,273 Lease Liability – Short-Term $ 162,674 Lease Liability – Long-Term 303,599 Lease Liability – Total $ 466,273 The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of June 30, 2021: Amounts due within 12 months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2022 $ 238,519 2023 126,091 2024 129,873 2025 - 2026 - Total Minimum Lease Payments 494,483 Less Effect of Discounting (28,210 ) Present Value of Future Minimum Lease Payments 466,273 Less Current Portion of Operating Lease Obligations (162,674 ) Long-Term Operating Lease Obligations $ 303,599 On October 9, 2019, the Company entered into a lease agreement with Alliance Funding Group which provided for a sale lease back on certain packing equipment. The terms of this agreement require us to pay $ 2,987 60 months 124,540 3 years 12.75 8,896 The following summarizes ROU assets under finance leases at June 30, 2021: SUMMARY OF ROU ASSETS UNDER FINANCE LEASES ROU asset-finance lease at September 30, 2020 $ 105,825 Impairment (105,825 ) ROU asset-finance lease at June 30, 2021 $ - The table below summarizes future minimum finance lease payments at June 30, 2021 for the 12 months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 33,113 2025 2,759 2026 - Total Minimum Lease Payments 102,098 Amount representing interest (18,039 ) Present Value of Minimum Lease Payments 84,059 Current Portion of Finance Lease Obligations (26,965 ) Finance Lease Obligations, Less Current Portion $ 57,094 The Company leases office space with terms ranging from month to month to 61 months 251,164 251,207 Cash and non cash activities associated with the leases for the nine months ended June 30, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 215,046 Operating cash outflows from finance lease: $ 8,896 Financing cash outflows from finance lease: $ 15,939 In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020 under favorable terms that are co-terminus with the original lease ending June 30, 2024. In the nine months ended June 30, 2021, we recognized sublease income of $ 59,439 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2022 $ 122,364 2023 126,017 2024 129,835 2025 — 2026 — Total $ 378,216 Loans On April 1, 2019, NuZee purchased a delivery van from Ford Motor Credit for $ 41,627 3,500 38,127 60 months 2.9 22,304 27,916 On February 15, 2019 NuZee KR entered into equipment financing for production equipment with ShinHan Bank for $ 60,563 86,518 36 months 4.33 50,206 85,001 The loan payments required for the next five remaining fiscal years are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2021 (July – September 2021) $ 1,895 $ 12,551 2022 (October 2021 – June 2022) 5,819 37,655 Total Current Portion $ 7,714 $ 50,206 $ 57,920 2022 (July – September 2022) $ 1,895 $ - 2023 7,947 - 2024 4,748 - 2025 - - Total LT Portion $ 14,590 $ - $ 14,590 Grand Total $ 22,304 $ 50,206 $ 72,510 Revenue Recognition We determine revenue recognition through the following steps in accordance with FASB Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”, which we adopted as of October 1, 2018 on a modified retrospective basis: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The adoption of Topic 606 did not have a material impact on our consolidated financial statements. Foreign Currency Translation The financial position and results of operations of each of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of each such subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity unless there is a sale or complete liquidation of the underlying foreign investment. Foreign currency translation adjustments comprising accumulated other comprehensive income (loss) amounted to $ (2,374) (59,510) Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Inventories Inventory, consisting principally of raw materials, work in process and finished goods held for production and sale, is stated at the lower of cost or net realizable value, cost being determined using the weighted average cost method. The Company reviews inventory levels at least quarterly and records a valuation allowance when appropriate. At June 30, 2021 and September 30, 2020, the carrying value of inventory of $ 428,856 245,370 SCHEDULE OF INVENTORY June 30, 2021 September 30, 2020 Raw materials $ 327,411 $ 176,231 Finished goods 101,445 69,139 Less – Inventory reserve - - Total $ 428,856 $ 245,370 Joint Venture On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. ( 50 313,012 110,000 160,000 43,012 The Company accounts for NLA using the equity method of accounting since the management of day to day operations at NLA ultimately lies with the Company’s joint venture partner as the operations of NLA are based in its partners facilities and our partner appoints the Chairman of the joint Board. As of June 30, 2021, the only activity in NLA was the contribution of two machines as described above and other start up related activities. $ 4,077 |
GEOGRAPHIC CONCENTRATION
GEOGRAPHIC CONCENTRATION | 9 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
GEOGRAPHIC CONCENTRATION | 2. GEOGRAPHIC CONCENTRATION The Company is organized in three geographical segments. The Company co-packs product for customers and produces and sells its products directly in North America and Korea. The Company has investor relations operations in Japan as a majority of our shareholders are based in Japan. In March of 2021, the Company wrote off $ 840,391 105,825 734,566 Geographic Concentrations SCHEDULE OF GEOGRAPHIC OPERATIONS Nine Months Ended Nine Months Ended June 30, 2021 June 30, 2020 Net Revenue: North America $ 1,077,986 $ 756,000 Japan - 258,526 South Korea 364,097 117,036 Net Revenue $ 1,442,083 $ 1,131,562 Property and equipment, net: As of June 30, 2021 As of September 30, 2020 North America $ 573,631 $ 1,422,575 Japan 1,808 2,813 South Korea 232,409 242,960 Property and equipment, net $ 807,848 $ 1,668,348 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS For the nine months ended June 30, 2021, we sold $ 28,299 |
ISSUANCE OF EQUITY SECURITIES
ISSUANCE OF EQUITY SECURITIES | 9 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
ISSUANCE OF EQUITY SECURITIES | 4. ISSUANCE OF EQUITY SECURITIES During the nine months ended June 30, 2021, the Company sold (i) 72,955 534,494 256,338 9.14 2,149,486 2,777,777 11,017,304 4.50 5.85 416,666 416,666 6,000 9,180 On January 11, 2021, the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors granted to Shanoop Kothari, who was serving at the time as both the Company’s Chief Financial Officer and Chief Operating Officer, in connection with the Committee’s determination of Mr. Kothari’s annual compensation, an award of 152,215 50,739 35,739 net shares were issued to Mr. Kothari following the forfeiture of 15,000 vested shares to cover taxes 50,739 50,737 On March 11, 2021, we terminated our At Market Issuance Sales Agreement, dated September 1, 2020 (the “ATM Agreement”), with B. Riley Securities, Inc. (f/k/a/ B. Riley FBR, Inc.) and The Benchmark Company, LLC (collectively, the “Agents”), pursuant to which we could from time to time offer and sell up to an aggregate of $ 50.0 477,605 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | 5. STOCK OPTIONS AND WARRANTS Options During the nine months ended June 30, 2021, the Company issued 15,000 1,369,938 770,000 3 years 50% of the options vesting immediately and the remaining 50% vesting 25% on each of the first two anniversaries of the grant date. 3 years 33% of the options vesting on each anniversary of the grant date. these options shall vest and become exercisable either (i) in the case of time-based options, as to 1/3 on each anniversary of the grant date, or (ii) in the case of performance-based options (the “Performance-Based Options”), based on the Company’s achievement of certain performance milestones established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2021, 2022, 2023 and 2024. 622,000 The exercise price for the options ranged from $ 2.91 16.79 ten years The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model using the assumptions noted as follows: expected volatility was based on the Company’s historical stock performance. The expected term of options granted was determined using the contractual term. The risk-free rate is calculated using the U.S. Treasury yield curve and is based on the expected term of the option. The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30, 2021: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED For non-employees, employees and independent Board members June 30, 2021 Risk-free interest rate 0.78 1.71 % Expected option life 10 years Expected volatility 300 311 % Expected dividend yield 0.00 % Exercise price $ 2.91 16.79 For the nine months ended June 30, 2021, 311,656 6,000 The following table summarizes stock option activity for nine months ended June 30, 2021: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2020 1,620,667 $ 5.74 7.3 $ 19,112,118 Granted 2,154,938 5.87 Exercised (6,000 ) 1.53 Expired - - Forfeited (311,656 ) 12.39 Outstanding at June 30, 2021 3,457,949 $ 5.23 8.3 $ 1,363,638 Exercisable at June 30, 2021 1,397,975 $ 6.01 7.7 $ 790,939 The Company is expensing these stock option awards on a straight-line basis over the requisite service period. The Company recognized stock option expenses of $ 8,002,917 6,520,427 1.5 4,505,498 A summary of the status of the Company’s nonvested options as of June 30, 2021, is presented below: SUMMARY OF UNVESTED SHARES Nonvested options Number of nonvested shares Weighted average grant date fair value Nonvested shares at September 30, 2020 762,917 $ 10.60 Granted 2,154,938 5.87 Forfeited (158,328 ) 12.11 Vested (699,554 ) 7.59 Nonvested shares at June 30, 2021 2,059,973 6.56 Warrants On June 23, 2020, as part of our agreement with Benchmark Company, LLC the underwriter of the Company’s June 2020 registered public offering of common stock, we issued 40,250 9.00 December 23, 2020 June 18, 2025 On March 19, 2021, we entered into an underwriting agreement in connection with our registered public offering (the “Offering”) of (i) 2,777,777 4.50 Each Series A Warrant entitles the registered holder to purchase one share of our common stock at an exercise price of $ 4.50 5.85 5 years The following table summarizes warrant activity for the nine months ended June 30, 2021: SCHEDULE OF WARRANT ACTIVITY Number of Shares Issuable Upon Exercise of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2020 40,250 $ 9.00 4.7 $ 321,598 Issued 4,791,665 4.95 Exercised - - Expired - - Outstanding June 30, 2021 4,831,915 $ 4.98 4.7 - Exercisable at June 30, 2021 4,831,915 $ 4.98 4.7 $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 6. SUBSEQUENT EVENTS Shanoop Kothari’s Resignation and Severance Agreement On June 22, 2021, Shanoop Kothari notified the Company of his resignation as Chief Financial Officer. Mr. Kothari’s resignation will be effective as of August 16, 2021 (the “Separation Date”). In connection with Mr. Kothari’s resignation, the Company entered into a Severance Agreement and General Release with Mr. Kothari on July 2, 2021 (the “Severance Agreement”). Pursuant to the Severance Agreement, Mr. Kothari’s 50,737 Appointment of Patrick Shearer as Chief Financial Officer and Issuance of Options On July 2, 2021 (the “Commencement Date”), the Company appointed Patrick Shearer to be its new Chief Financial Officer, effective immediately. In addition, pursuant to Mr. Shearer’s employment agreement, the Company granted to Mr. Shearer on the Commencement Date an award of options to purchase 200,000 80,000 60,000 60,000 3.12 ten years CEO Compensation On July 2, 2021, the Compensation Committee approved a grant of nonqualified performance-based options (the “Options”) to Masateru Higashida, the Company’s President and Chief Executive Officer, to purchase 896,743 The Options will vest, if at all, based on the extent to which the Company achieves certain performance objectives relating to our earnings before income taxes in each of the fiscal years ending September 30, 2022 (“fiscal year 2022”), September 30, 2023 (“fiscal year 2023”) and September 30, 2024 (“fiscal year 2024”). Pursuant to the award agreement, (i) 179,349 269,023 448,371 3.12 ten years Also on July 2, 2021, the Compensation Committee awarded a deferred bonus of $ 75,000 Also on July 2, 2021, the Compensation Committee approved the parameters of the cash bonus for Mr. Higashida (the “Fiscal Year 2022 Cash Bonus”) for fiscal year 2022. Pursuant to Mr. Higashida’s Executive Employment Agreement dated as of August 15, 2017, the Compensation Committee established the relevant performance metrics and goals for determining the amount of the Fiscal Year 2022 Cash Bonus that Mr. Higashida would be entitled to receive, assuming achievement by the Company of the respective target and maximum performance levels under each metric established for fiscal year 2022. The Fiscal Year 2022 Cash Bonus, if any, payable to Mr. Higashida will be determined by the extent to which the Company achieves certain performance objectives relating to the Company’s net revenues and net cash provided by operating activities in fiscal year 2022, with a target Fiscal Year 2022 Cash Bonus opportunity of $ 105,000 210,000 180,000 300,000 Issuance of Options to New Employees On July 29, 2021, the Company issued a total of 115,000 92,000 23,000 These options shall vest and become exercisable either (i) in the case of time-based options, as to 1/3 on each anniversary of each employee’s employment start date, or (ii) in the case of the Performance-Based Options, based on either (a) the Company’s achievement of certain performance milestones established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2021, 2022, 2023 and 2024, or (b) the employee’s achievement of certain performance milestones tied to adjusted gross sales established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2022, 2023 and 2024. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Company prepares its financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its former majority owned subsidiary (which was sold as of September 28, 2020, as described below), which has a fiscal year end of September 30. All significant intercompany accounts, balances and transactions have been eliminated upon consolidation. On September 28, 2020, the Company entered into a Stock Transfer Agreement with Eguchi Holdings Co., Ltd. (“EHCL”), pursuant to which the Company sold to EHCL for an aggregate sale price of approximately $ 34,000 70 The Company has two wholly owned international subsidiaries in NuZee KOREA Ltd. (“NuZee KR”) and NuZee Investment Co., Ltd. (“NuZee INV”). |
Stock Split | Stock Split On October 28, 2019, we completed a l-for-3 reverse stock split |
Earnings per Share | Earnings per Share Basic earnings per common share is equal to net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of June 30, 2021 and June 30, 2020, the total number of common stock equivalents was 8,289,864 1,725,000 |
Capital Resources | Capital Resources Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of June 30, 2021, the Company had cash of $ 12,704,257 |
Major Customers | Major Customers In the nine months ended June 30, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Nine months ended June 30, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Customer WP $ 456,247 32 % $ 124,814 39 % Nine months ended June 30, 2020: C ustomer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer K $ 284,099 25 % $ - 0 % Customer WP $ 259,925 23 % $ 7,767 11 % Customer J $ 188,574 17 % $ 175 0 % |
Lease | Lease In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The Company implemented ASU No. 2016-02 on October 1, 2019. The Company does a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. The Company has one significant long-term operating lease for office and manufacturing space in Plano, Texas. The leased property in Plano, Texas, has a remaining lease term through June of 2024. The lease has an option to extend beyond the stated termination date, but exercise of this option is not probable. The Company did not apply the recognition requirements of ASC 842 to operating leases with a remaining lease term of 12 months The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2020, through the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases are as follows: SCHEDULE OF ROU ASSETS AND LEASE LIABILITY October 1, 2020 ROU Asset $ 652,197 Lease Liability $ 659,391 During the prior year analysis of leases, we determined to renew the office and manufacturing space in Vista, CA through January 31, 2022, which was previously scheduled to be vacated at June 30, 2020. Additionally, the Korean office and manufacturing space lease was extended through June 2022 and an apartment lease was signed through June 2022. Accordingly, we have added ROU assets and lease liabilities related to those leases at June 30, 2020. The direct-leased property in Vista, California has a remaining lease term through January of 2022. The leased properties in both Korea and Vista, California have options to extend beyond the stated termination date, but exercise of these options are not probable. The sub-leased property in Vista, California, is leased month-to-month and has been calculated as a ROU Asset co-terminus with the direct-leased property. In September 2020, we entered into an 18 Effective September 1, 2020, we converted our month-to-month sublease in Vista, California to a 17 17 As of June 30, 2021, our operating leases had a weighted average remaining lease term of 1.9 SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2020 $ 652,197 Amortization during the period (202,947 ) ROU Asset –June 30, 2021 $ 449,250 Lease Liability – October 1, 2020 $ 659,391 Amortization during the period (193,118 ) Lease Liability – June 30, 2021 $ 466,273 Lease Liability – Short-Term $ 162,674 Lease Liability – Long-Term 303,599 Lease Liability – Total $ 466,273 The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of June 30, 2021: Amounts due within 12 months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2022 $ 238,519 2023 126,091 2024 129,873 2025 - 2026 - Total Minimum Lease Payments 494,483 Less Effect of Discounting (28,210 ) Present Value of Future Minimum Lease Payments 466,273 Less Current Portion of Operating Lease Obligations (162,674 ) Long-Term Operating Lease Obligations $ 303,599 On October 9, 2019, the Company entered into a lease agreement with Alliance Funding Group which provided for a sale lease back on certain packing equipment. The terms of this agreement require us to pay $ 2,987 60 months 124,540 3 years 12.75 8,896 The following summarizes ROU assets under finance leases at June 30, 2021: SUMMARY OF ROU ASSETS UNDER FINANCE LEASES ROU asset-finance lease at September 30, 2020 $ 105,825 Impairment (105,825 ) ROU asset-finance lease at June 30, 2021 $ - The table below summarizes future minimum finance lease payments at June 30, 2021 for the 12 months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 33,113 2025 2,759 2026 - Total Minimum Lease Payments 102,098 Amount representing interest (18,039 ) Present Value of Minimum Lease Payments 84,059 Current Portion of Finance Lease Obligations (26,965 ) Finance Lease Obligations, Less Current Portion $ 57,094 The Company leases office space with terms ranging from month to month to 61 months 251,164 251,207 Cash and non cash activities associated with the leases for the nine months ended June 30, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 215,046 Operating cash outflows from finance lease: $ 8,896 Financing cash outflows from finance lease: $ 15,939 In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020 under favorable terms that are co-terminus with the original lease ending June 30, 2024. In the nine months ended June 30, 2021, we recognized sublease income of $ 59,439 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2022 $ 122,364 2023 126,017 2024 129,835 2025 — 2026 — Total $ 378,216 |
Loans | Loans On April 1, 2019, NuZee purchased a delivery van from Ford Motor Credit for $ 41,627 3,500 38,127 60 months 2.9 22,304 27,916 On February 15, 2019 NuZee KR entered into equipment financing for production equipment with ShinHan Bank for $ 60,563 86,518 36 months 4.33 50,206 85,001 The loan payments required for the next five remaining fiscal years are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2021 (July – September 2021) $ 1,895 $ 12,551 2022 (October 2021 – June 2022) 5,819 37,655 Total Current Portion $ 7,714 $ 50,206 $ 57,920 2022 (July – September 2022) $ 1,895 $ - 2023 7,947 - 2024 4,748 - 2025 - - Total LT Portion $ 14,590 $ - $ 14,590 Grand Total $ 22,304 $ 50,206 $ 72,510 |
Revenue Recognition | Revenue Recognition We determine revenue recognition through the following steps in accordance with FASB Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”, which we adopted as of October 1, 2018 on a modified retrospective basis: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The adoption of Topic 606 did not have a material impact on our consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of each of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of each such subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity unless there is a sale or complete liquidation of the underlying foreign investment. Foreign currency translation adjustments comprising accumulated other comprehensive income (loss) amounted to $ (2,374) (59,510) Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. |
Inventories | Inventories Inventory, consisting principally of raw materials, work in process and finished goods held for production and sale, is stated at the lower of cost or net realizable value, cost being determined using the weighted average cost method. The Company reviews inventory levels at least quarterly and records a valuation allowance when appropriate. At June 30, 2021 and September 30, 2020, the carrying value of inventory of $ 428,856 245,370 SCHEDULE OF INVENTORY June 30, 2021 September 30, 2020 Raw materials $ 327,411 $ 176,231 Finished goods 101,445 69,139 Less – Inventory reserve - - Total $ 428,856 $ 245,370 |
Joint Venture | Joint Venture On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. ( 50 313,012 110,000 160,000 43,012 The Company accounts for NLA using the equity method of accounting since the management of day to day operations at NLA ultimately lies with the Company’s joint venture partner as the operations of NLA are based in its partners facilities and our partner appoints the Chairman of the joint Board. As of June 30, 2021, the only activity in NLA was the contribution of two machines as described above and other start up related activities. $ 4,077 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS | In the nine months ended June 30, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Nine months ended June 30, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Customer WP $ 456,247 32 % $ 124,814 39 % Nine months ended June 30, 2020: C ustomer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer K $ 284,099 25 % $ - 0 % Customer WP $ 259,925 23 % $ 7,767 11 % Customer J $ 188,574 17 % $ 175 0 % |
SCHEDULE OF ROU ASSETS AND LEASE LIABILITY | The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2020, through the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases are as follows: SCHEDULE OF ROU ASSETS AND LEASE LIABILITY October 1, 2020 ROU Asset $ 652,197 Lease Liability $ 659,391 |
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE | As of June 30, 2021, our operating leases had a weighted average remaining lease term of 1.9 SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2020 $ 652,197 Amortization during the period (202,947 ) ROU Asset –June 30, 2021 $ 449,250 Lease Liability – October 1, 2020 $ 659,391 Amortization during the period (193,118 ) Lease Liability – June 30, 2021 $ 466,273 Lease Liability – Short-Term $ 162,674 Lease Liability – Long-Term 303,599 Lease Liability – Total $ 466,273 |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES | The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of June 30, 2021: Amounts due within 12 months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2022 $ 238,519 2023 126,091 2024 129,873 2025 - 2026 - Total Minimum Lease Payments 494,483 Less Effect of Discounting (28,210 ) Present Value of Future Minimum Lease Payments 466,273 Less Current Portion of Operating Lease Obligations (162,674 ) Long-Term Operating Lease Obligations $ 303,599 |
SUMMARY OF ROU ASSETS UNDER FINANCE LEASES | The following summarizes ROU assets under finance leases at June 30, 2021: SUMMARY OF ROU ASSETS UNDER FINANCE LEASES ROU asset-finance lease at September 30, 2020 $ 105,825 Impairment (105,825 ) ROU asset-finance lease at June 30, 2021 $ - |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES | The table below summarizes future minimum finance lease payments at June 30, 2021 for the 12 months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 33,113 2025 2,759 2026 - Total Minimum Lease Payments 102,098 Amount representing interest (18,039 ) Present Value of Minimum Lease Payments 84,059 Current Portion of Finance Lease Obligations (26,965 ) Finance Lease Obligations, Less Current Portion $ 57,094 |
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES | Cash and non cash activities associated with the leases for the nine months ended June 30, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 215,046 Operating cash outflows from finance lease: $ 8,896 Financing cash outflows from finance lease: $ 15,939 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE | SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2022 $ 122,364 2023 126,017 2024 129,835 2025 — 2026 — Total $ 378,216 |
SCHEDULE OF LOAN PAYMENTS | The loan payments required for the next five remaining fiscal years are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2021 (July – September 2021) $ 1,895 $ 12,551 2022 (October 2021 – June 2022) 5,819 37,655 Total Current Portion $ 7,714 $ 50,206 $ 57,920 2022 (July – September 2022) $ 1,895 $ - 2023 7,947 - 2024 4,748 - 2025 - - Total LT Portion $ 14,590 $ - $ 14,590 Grand Total $ 22,304 $ 50,206 $ 72,510 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY June 30, 2021 September 30, 2020 Raw materials $ 327,411 $ 176,231 Finished goods 101,445 69,139 Less – Inventory reserve - - Total $ 428,856 $ 245,370 |
GEOGRAPHIC CONCENTRATION (Table
GEOGRAPHIC CONCENTRATION (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
SCHEDULE OF GEOGRAPHIC OPERATIONS | Geographic Concentrations SCHEDULE OF GEOGRAPHIC OPERATIONS Nine Months Ended Nine Months Ended June 30, 2021 June 30, 2020 Net Revenue: North America $ 1,077,986 $ 756,000 Japan - 258,526 South Korea 364,097 117,036 Net Revenue $ 1,442,083 $ 1,131,562 Property and equipment, net: As of June 30, 2021 As of September 30, 2020 North America $ 573,631 $ 1,422,575 Japan 1,808 2,813 South Korea 232,409 242,960 Property and equipment, net $ 807,848 $ 1,668,348 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED | The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30, 2021: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED For non-employees, employees and independent Board members June 30, 2021 Risk-free interest rate 0.78 1.71 % Expected option life 10 years Expected volatility 300 311 % Expected dividend yield 0.00 % Exercise price $ 2.91 16.79 |
SUMMARY OF STOCK OPTION ACTIVITY | The following table summarizes stock option activity for nine months ended June 30, 2021: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2020 1,620,667 $ 5.74 7.3 $ 19,112,118 Granted 2,154,938 5.87 Exercised (6,000 ) 1.53 Expired - - Forfeited (311,656 ) 12.39 Outstanding at June 30, 2021 3,457,949 $ 5.23 8.3 $ 1,363,638 Exercisable at June 30, 2021 1,397,975 $ 6.01 7.7 $ 790,939 |
SUMMARY OF UNVESTED SHARES | A summary of the status of the Company’s nonvested options as of June 30, 2021, is presented below: SUMMARY OF UNVESTED SHARES Nonvested options Number of nonvested shares Weighted average grant date fair value Nonvested shares at September 30, 2020 762,917 $ 10.60 Granted 2,154,938 5.87 Forfeited (158,328 ) 12.11 Vested (699,554 ) 7.59 Nonvested shares at June 30, 2021 2,059,973 6.56 |
SCHEDULE OF WARRANT ACTIVITY | The following table summarizes warrant activity for the nine months ended June 30, 2021: SCHEDULE OF WARRANT ACTIVITY Number of Shares Issuable Upon Exercise of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2020 40,250 $ 9.00 4.7 $ 321,598 Issued 4,791,665 4.95 Exercised - - Expired - - Outstanding June 30, 2021 4,831,915 $ 4.98 4.7 - Exercisable at June 30, 2021 4,831,915 $ 4.98 4.7 $ - |
SCHEDULE OF REVENUE BY MAJOR CU
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Information [Line Items] | ||||
Sales Amount | $ 510,032 | $ 191,962 | $ 1,442,083 | $ 1,131,562 |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer WP [Member] | ||||
Product Information [Line Items] | ||||
Sales Amount | $ 456,247 | $ 259,925 | ||
Concentration risk percentage | 32.00% | 23.00% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer K [Member] | ||||
Product Information [Line Items] | ||||
Sales Amount | $ 284,099 | |||
Concentration risk percentage | 25.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer J [Member] | ||||
Product Information [Line Items] | ||||
Sales Amount | $ 188,574 | |||
Concentration risk percentage | 17.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer WP [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 39.00% | 11.00% | ||
Accounts Receivable Amount | $ 124,814 | 7,767 | $ 124,814 | $ 7,767 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer K [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 0.00% | |||
Accounts Receivable Amount | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer J [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 0.00% | |||
Accounts Receivable Amount | $ 175 | $ 175 |
SCHEDULE OF ROU ASSETS AND LEAS
SCHEDULE OF ROU ASSETS AND LEASE LIABILITY (Details) - USD ($) | Jun. 30, 2021 | Oct. 02, 2020 | Sep. 30, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
ROU Asset | $ 449,250 | $ 652,197 | |
Lease Liability | $ 466,273 | $ 659,391 | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
ROU Asset | $ 652,197 | ||
Lease Liability | $ 659,391 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||
ROU Asset | $ 652,197 | |
Amortization during the period | (202,947) | |
ROU Asset | 449,250 | |
Lease Liability | 659,391 | |
Amortization during the period | (193,118) | |
Lease Liability | 466,273 | |
Lease Liability - Short-Term | 162,674 | $ 263,678 |
Lease Liability - Long-Term | 303,599 | 395,713 |
Lease Liability - Total | $ 466,273 | $ 659,391 |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES (Details) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Accounting Policies [Abstract] | ||
2022 | $ 238,519 | |
2023 | 126,091 | |
2024 | 129,873 | |
2025 | ||
2026 | ||
Total Minimum Lease Payments | 494,483 | |
Less Effect of Discounting | (28,210) | |
Present Value of Future Minimum Lease Payments | 466,273 | $ 659,391 |
Less Current Portion of Operating Lease Obligations | (162,674) | (263,678) |
Long-Term Operating Lease Obligations | $ 303,599 | $ 395,713 |
SUMMARY OF ROU ASSETS UNDER FIN
SUMMARY OF ROU ASSETS UNDER FINANCE LEASES (Details) | 9 Months Ended |
Jun. 30, 2021USD ($) | |
Lessor, Lease, Description [Line Items] | |
ROU asset-finance lease, beginning balance | $ 105,825 |
ROU asset-finance lease, ending balance | |
Finance Lease [Member] | |
Lessor, Lease, Description [Line Items] | |
ROU asset-finance lease, beginning balance | 105,825 |
Impairment | (105,825) |
ROU asset-finance lease, ending balance |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES (Details) | Jun. 30, 2021USD ($) |
Accounting Policies [Abstract] | |
2022 | $ 33,113 |
2023 | 33,113 |
2024 | 33,113 |
2025 | 2,759 |
2026 | |
Total Minimum Lease Payments | 102,098 |
Amount representing interest | (18,039) |
Present Value of Minimum Lease Payments | 84,059 |
Current Portion of Finance Lease Obligations | (26,965) |
Finance Lease Obligations, Less Current Portion | $ 57,094 |
SCHEDULE OF CASH AND NON-CASH A
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES (Details) | 9 Months Ended |
Jun. 30, 2021USD ($) | |
Accounting Policies [Abstract] | |
Operating cash outflows from operating leases: | $ 215,046 |
Operating cash outflows from finance lease: | 8,896 |
Financing cash outflows from finance lease: | $ 15,939 |
SCHEDULE OF FUTURE MINIMUM LE_2
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE (Details) | Jun. 30, 2021USD ($) |
Accounting Policies [Abstract] | |
2022 | $ 122,364 |
2023 | 126,017 |
2024 | 129,835 |
2025 | |
2026 | |
Total | $ 378,216 |
SCHEDULE OF LOAN PAYMENTS (Deta
SCHEDULE OF LOAN PAYMENTS (Details) | Jun. 30, 2021USD ($) |
Summary of Investment Holdings [Line Items] | |
Total Current Portion | $ 57,920 |
Total LT Portion | 14,590 |
Total | 72,510 |
Ford Motor Credit [Member] | |
Summary of Investment Holdings [Line Items] | |
2021 (July – September 2021) | 1,895 |
2022 (October 2021 – June 2022) | 5,819 |
Total Current Portion | 7,714 |
2022 (July – September 2022) | 1,895 |
2023 | 7,947 |
2024 | 4,748 |
2025 | |
Total LT Portion | 14,590 |
Total | 22,304 |
ShinHan Bank [Member] | |
Summary of Investment Holdings [Line Items] | |
2021 (July – September 2021) | 12,551 |
2022 (October 2021 – June 2022) | 37,655 |
Total Current Portion | 50,206 |
2022 (July – September 2022) | |
2023 | |
2024 | |
2025 | |
Total LT Portion | |
Total | $ 50,206 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Accounting Policies [Abstract] | ||
Raw materials | $ 327,411 | $ 176,231 |
Finished goods | 101,445 | 69,139 |
Less – Inventory reserve | ||
Total | $ 428,856 | $ 245,370 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Sep. 28, 2020 | Sep. 01, 2020 | Oct. 28, 2019 | Oct. 09, 2019 | Jun. 28, 2019 | Apr. 02, 2019 | Feb. 15, 2019 | Sep. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jan. 09, 2020 |
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Common stock issued value | $ 11,017,304 | $ 2,683,980 | $ 4,648,174 | $ 1,994,523 | ||||||||||||
Reverse stock split | l-for-3 reverse stock split | |||||||||||||||
Common stock equivalents | 8,289,864 | 1,725,000 | ||||||||||||||
Cash | $ 4,398,545 | $ 12,704,257 | $ 12,704,257 | |||||||||||||
Financing lease remaining lease term | 3 years | 3 years | ||||||||||||||
Financing lease discount rate | 12.75% | 12.75% | ||||||||||||||
Interest expense on finance lease liabilities | $ 8,896 | |||||||||||||||
Sub lease, income | 59,439 | |||||||||||||||
Foreign currency translation adjustment | (2,374) | $ (59,510) | ||||||||||||||
Inventory | 245,370 | $ 428,856 | 428,856 | |||||||||||||
Cash contribution | 110,000 | |||||||||||||||
Loss from equity method investments | 4,077 | |||||||||||||||
Ford Motor Credit [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Debt outstanding | 27,916 | 22,304 | 22,304 | |||||||||||||
ShinHan Bank [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Debt outstanding | $ 85,001 | $ 50,206 | $ 50,206 | |||||||||||||
Vehicles [Member] | Ford Motor Credit [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Purchase price | $ 41,627 | |||||||||||||||
Payment to purchase equipment | 3,500 | |||||||||||||||
Financed amount | $ 38,127 | |||||||||||||||
Debt term | 60 months | |||||||||||||||
Interest rate | 2.90% | |||||||||||||||
General and Administrative Expense [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Weighted average remaining lease term | 61 months | 61 months | ||||||||||||||
Rent expense | $ 251,164 | $ 251,207 | ||||||||||||||
Plano, Texas [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Sublease description | In September 2020, we entered into an 18-month sublease effective October 1, 2020 reducing our space and term in Plano, Texas. Accordingly, this lease has been added to our right-of-use asset balance at September 30, 2020. This lease is for the Company’s principal executive office located at 1401 Capital Avenue, Suite B, Plano, Texas 75074. | |||||||||||||||
Subease term | 18 years | |||||||||||||||
Vista, California [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Sublease description | Effective September 1, 2020, we converted our month-to-month sublease in Vista, California to a 17-month sublease ending January 31, 2022 which is co-terminus with our direct lease in Vista. The month-to-month sublease was recognized as a right-of-use asset in our June 30, 2020 analysis. The terms of the 17-month lease are similar to the terms used to value the right-of-use asset at June 30, 2020. | |||||||||||||||
Subease term | 17 years | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Operating Lease, remaining lease term | 12 months | 12 months | ||||||||||||||
Joint Venture Agreement [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Machine carrying cost | $ 313,012 | |||||||||||||||
NuZee JAPAN Co., Ltd [Member] | Stock Transfer Agreement [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Common stock issued value | $ 34,000 | |||||||||||||||
Equity percentage | 70.00% | |||||||||||||||
Alliance Funding Group [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Payment of equipment on lease | $ 124,540 | |||||||||||||||
Alliance Funding Group [Member] | Lease Agreement [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Payment of equipment on lease | $ 2,987 | |||||||||||||||
Weighted average remaining lease term | 60 months | |||||||||||||||
NuZee Korea Ltd [Member] | Equipment [Member] | ShinHan Bank [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Financed amount | $ 60,563 | |||||||||||||||
Debt term | 36 months | |||||||||||||||
Interest rate | 4.33% | |||||||||||||||
Increase in debt | $ 86,518 | |||||||||||||||
Industrial Marino, S.A. de C.V. and NuZee Latin America, S.A. de C.V. [Member] | Joint Venture Agreement [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Equity percentage | 50.00% | |||||||||||||||
NLA [Member] | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Gain on investments | $ 160,000 | |||||||||||||||
Loss on investments | $ 43,012 |
SCHEDULE OF GEOGRAPHIC OPERATIO
SCHEDULE OF GEOGRAPHIC OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Net Revenue | $ 510,032 | $ 191,962 | $ 1,442,083 | $ 1,131,562 | |
Property and equipment, net | 807,848 | 1,668,348 | 807,848 | 1,668,348 | $ 1,668,348 |
North America [Member] | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Net Revenue | 1,077,986 | 756,000 | |||
Property and equipment, net | 573,631 | 1,422,575 | 573,631 | 1,422,575 | |
JAPAN | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Net Revenue | 258,526 | ||||
Property and equipment, net | 1,808 | 2,813 | 1,808 | 2,813 | |
KOREA, REPUBLIC OF | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Net Revenue | 364,097 | 117,036 | |||
Property and equipment, net | $ 232,409 | $ 242,960 | $ 232,409 | $ 242,960 |
GEOGRAPHIC CONCENTRATION (Detai
GEOGRAPHIC CONCENTRATION (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Impairment on property and equipment | $ 840,391 | |
North America [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Assets write off | 840,391 | |
Impairment on ROU assets | 105,825 | |
Impairment on property and equipment | $ 734,566 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 9 Months Ended |
Jun. 30, 2021USD ($) | |
NuZee Latin America [Member] | |
Related Party Transaction [Line Items] | |
Revenues from related parties | $ 28,299 |
ISSUANCE OF EQUITY SECURITIES (
ISSUANCE OF EQUITY SECURITIES (Details Narrative) - USD ($) | Mar. 19, 2021 | Mar. 11, 2021 | Jan. 11, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 23, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Net proceeds from issuance common stock | $ 13,701,284 | $ 6,867,786 | ||||||||
Warrant exercise price | $ 9 | |||||||||
Stock option exercised during period | 6,000 | |||||||||
Proceeds from stock option exercise | $ 9,180 | |||||||||
Shanoop Kothari [Member] | 2019 Stock Incentive Plan [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stock award granted, during period | 152,215 | |||||||||
Vesting of shares, description | 35,739 net shares were issued to Mr. Kothari following the forfeiture of 15,000 vested shares to cover taxes | |||||||||
Shanoop Kothari [Member] | 2019 Stock Incentive Plan [Member] | Vesting Immediately [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Number of shares vested during period | 50,739 | |||||||||
Shanoop Kothari [Member] | 2019 Stock Incentive Plan [Member] | Vest on March 31, 2021 [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Number of shares vested during period | 50,739 | |||||||||
Shanoop Kothari [Member] | 2019 Stock Incentive Plan [Member] | Vest on March 31, 2022 [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Number of shares vested during period | 50,737 | |||||||||
Stock Options [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stock option exercised during period | 6,000 | |||||||||
Proceeds from stock option exercise | $ 9,180 | |||||||||
Underwritten, Over Allotment Option [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares sold during period | 2,777,777 | |||||||||
Net proceeds from public offering | $ 11,017,304 | |||||||||
Issuance of warrants, description | 2,777,777 units (“Units”) in an underwritten registered public offering for aggregate net proceeds of $11,017,304 which includes the proceeds from the underwriter’s full exercise of their overallotment option with respect to the warrant component of the Units, as further described below, with each Unit consisting of (a) one share of our common stock, (b) one Series A warrant (each, a “Series A Warrant” and collectively, the “Series A Warrants”) to purchase one share of our common stock with an initial exercise price of $4.50 per whole share, and (c) one Series B warrant (each, a “Series B Warrant” and collectively, the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase one-half share of our common stock with an initial exercise price of $5.85 per whole share, and (ii) 416,666 Series A Warrants and 416,666 Series B Warrants, each pursuant to the underwriter’s full exercise of their overallotment option with respect to such warrants. | |||||||||
ATM Agreement [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares sold during period | 50,000,000 | |||||||||
Stock issuance expense | $ 477,605 | |||||||||
Common Stock [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares issued during period, shares | 2,782,111 | 324,959 | 700,000 | 111,738 | 256,338 | |||||
Shares issued, price per share | $ 9.14 | |||||||||
Net proceeds from issuance common stock | $ 2,149,486 | |||||||||
Stock option exercised during period | 6,000 | |||||||||
Common Stock [Member] | Triton Funds LP [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares sold during period | 72,955 | |||||||||
Net proceeds from public offering | $ 534,494 | |||||||||
Series A Warrant [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Warrant exercise price | $ 4.50 | |||||||||
Series A Warrant [Member] | Underwritten, Over Allotment Option [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares sold during period | 416,666 | |||||||||
Series B Warrant [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Warrant exercise price | $ 5.85 | |||||||||
Series B Warrant [Member] | Underwritten, Over Allotment Option [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares sold during period | 416,666 |
SCHEDULE OF WEIGHTED AVERAGE AS
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED (Details) - For Non-Employees and Indpendent Board [Member] | 9 Months Ended |
Jun. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 0.78% |
Risk-free interest rate, maximum | 1.71% |
Expected option life | 10 years |
Expected volatility, minimum | 300.00% |
Expected volatility, maximum | 311.00% |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 2.91 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 16.79 |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) | 9 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options Outstanding, Beginning | shares | 1,620,667 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 5.74 |
Weighted Average Remaining Contractual Life (years) Stock Options Outstanding, Beginning | 7 years 3 months 18 days |
Aggregate Intrinsic Value Options Outstanding, Beginning | $ | $ 19,112,118 |
Number of Options, Granted | shares | 2,154,938 |
Weighted Average Exercise Price, Granted | $ / shares | $ 5.87 |
Number of Options, Exercised | shares | (6,000) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 1.53 |
Number of Options, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Options, Forfeited | shares | (311,656) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ 12.39 |
Number of Options Outstanding, Ending | shares | 3,457,949 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 5.23 |
Weighted Average Remaining Contractual Life (years) Stock Options Outstanding, Ending Balance | 8 years 3 months 18 days |
Aggregate Intrinsic Value Options Outstanding, Ending Balance | $ | $ 1,363,638 |
Number of Options Exercisable | shares | 1,397,975 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.01 |
Weighted Average Remaining Contractual Life (years) Stock Options, Exercisable | 7 years 8 months 12 days |
Aggregate Intrinsic Value Options, Exercisable | $ | $ 790,939 |
SUMMARY OF UNVESTED SHARES (Det
SUMMARY OF UNVESTED SHARES (Details) | 9 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Nonvested Shares, Beginning | shares | 762,917 |
Weighted Average Grant Date Fair Value Nonvested Shares Beginning | $ / shares | $ 10.60 |
Number of Nonvested Shares, Granted | shares | 2,154,938 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 5.87 |
Number of Nonvested Shares, Forfeited | shares | (158,328) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 12.11 |
Number of Nonvested Shares, Vested | shares | (699,554) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 7.59 |
Number of Nonvested Shares, Ending | shares | 2,059,973 |
Weighted Average Grant Date Fair Value Nonvested Shares Ending | $ / shares | $ 6.56 |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) | 9 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Warrants Outstanding, Beginning | shares | 40,250 |
Weighted Average Exercise Price, Beginning | $ / shares | $ 9 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Beginning Balance | 4 years 8 months 12 days |
Aggregate Intrinsic Value Warrants Outstanding, Beginning | $ | $ 321,598 |
Number of Warrants, Issued | shares | 4,791,665 |
Weighted Average Exercise Price, Issued | $ / shares | $ 4.95 |
Number of Warrants, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Warrants, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Warrants Outstanding, Ending | shares | 4,831,915 |
Weighted Average Exercise Price, Ending | $ / shares | $ 4.98 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Ending Balance | 4 years 8 months 12 days |
Aggregate Intrinsic Value Warrants Outstanding, Ending | $ | |
Number of Warrants Exercisable | shares | 4,831,915 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.98 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Exercisable | 4 years 8 months 12 days |
Aggregate Intrinsic Value Warrants, Exercisable | $ |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | Mar. 19, 2021 | Jun. 23, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vest and exercisable period | 7 years 8 months 12 days | ||||
Shares issued | 2,154,938 | ||||
Stock option exercise price | $ 1.53 | ||||
Options expiration term | 10 years | ||||
Stock option forfeiture during period | 311,656 | ||||
Shares were issued upon the exercise of stock options | 6,000 | ||||
Warrant to purchase common stock | 40,250 | ||||
Warrant exercise price | $ 9 | ||||
Warrants exercisable date | Dec. 23, 2020 | ||||
Warrant expiration date | Jun. 18, 2025 | ||||
Series A Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrant exercise price | $ 4.50 | ||||
Warrants term | 5 years | ||||
Series B Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrant exercise price | $ 5.85 | ||||
Warrants term | 5 years | ||||
Termination of Employment [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option forfeiture during period | 311,656 | ||||
Underwritten, Over Allotment Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of warrants, description | 2,777,777 units (“Units”) in an underwritten registered public offering for aggregate net proceeds of $11,017,304 which includes the proceeds from the underwriter’s full exercise of their overallotment option with respect to the warrant component of the Units, as further described below, with each Unit consisting of (a) one share of our common stock, (b) one Series A warrant (each, a “Series A Warrant” and collectively, the “Series A Warrants”) to purchase one share of our common stock with an initial exercise price of $4.50 per whole share, and (c) one Series B warrant (each, a “Series B Warrant” and collectively, the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase one-half share of our common stock with an initial exercise price of $5.85 per whole share, and (ii) 416,666 Series A Warrants and 416,666 Series B Warrants, each pursuant to the underwriter’s full exercise of their overallotment option with respect to such warrants. | ||||
Shares sold during period | 2,777,777 | ||||
Underwritten, Over Allotment Option [Member] | Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of warrants, description | (i) 2,777,777 units (the “Units”), at a price to the public of $4.50 per Unit, with each Unit consisting of (a) one share of our common stock, (b) one Series A Warrant, and (c) one Series B Warrant, and (ii) 416,666 Series A Warrants and 416,666 Series B Warrants, each pursuant to the underwriter’s full exercise of their overallotment option with respect to such warrants. | ||||
Shares sold during period | 2,777,777 | ||||
Underwritten, Over Allotment Option [Member] | Series A Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares sold during period | 416,666 | ||||
Underwritten, Over Allotment Option [Member] | Series B Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares sold during period | 416,666 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 2.91 | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 16.79 | ||||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | 622,000 | ||||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vest and exercisable period | 1 year 6 months | ||||
Shares were issued upon the exercise of stock options | 6,000 | ||||
Stock option expenses | $ 8,002,917 | $ 4,505,498 | |||
Unamortized option expense | $ 6,520,427 | ||||
Independent Contractors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options issued to independent contractors | 15,000 | ||||
Stock option vest and exercisable period | 3 years | ||||
Vesting percentage description | 33% of the options vesting on each anniversary of the grant date. | ||||
Independent Board Members [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options issued to independent contractors | 1,369,938 | ||||
Stock option vest and exercisable period | 3 years | ||||
Vesting percentage description | 50% of the options vesting immediately and the remaining 50% vesting 25% on each of the first two anniversaries of the grant date. | ||||
Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options issued to independent contractors | 770,000 | ||||
Vesting percentage description | these options shall vest and become exercisable either (i) in the case of time-based options, as to 1/3 on each anniversary of the grant date, or (ii) in the case of performance-based options (the “Performance-Based Options”), based on the Company’s achievement of certain performance milestones established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2021, 2022, 2023 and 2024. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 29, 2021 | Jul. 02, 2021 | May 23, 2021 | May 22, 2021 | Jun. 30, 2021 |
Subsequent Event [Line Items] | |||||
Stock options, exercise price | $ 5.87 | ||||
Options expiration period | 10 years | ||||
Masateru Higashida, President and CEO [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Annual base salary | $ 300,000 | $ 180,000 | |||
Subsequent Event [Member] | Shanoop Kothari [Member] | |||||
Subsequent Event [Line Items] | |||||
Outstanding restricted shares accelerated to vest | 50,737 | ||||
Subsequent Event [Member] | Mr.Shearer, CFO [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 200,000 | ||||
Stock options, exercise price | $ 3.12 | ||||
Options expiration period | 10 years | ||||
Subsequent Event [Member] | Mr.Shearer, CFO [Member] | First Anniversary [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 80,000 | ||||
Subsequent Event [Member] | Mr.Shearer, CFO [Member] | Second Anniversary [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 60,000 | ||||
Subsequent Event [Member] | Mr.Shearer, CFO [Member] | Third Anniversary [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 60,000 | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | |||||
Subsequent Event [Line Items] | |||||
Deferred bonus payable | $ 75,000 | ||||
Cash bonus opportunity | 105,000 | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | Maximum [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash bonus opportunity | $ 210,000 | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 896,743 | ||||
Stock options, exercise price | $ 3.12 | ||||
Options expiration period | 10 years | ||||
Vesting of shares, description | The Options will vest, if at all, based on the extent to which the Company achieves certain performance objectives relating to our earnings before income taxes in each of the fiscal years ending September 30, 2022 (“fiscal year 2022”), September 30, 2023 (“fiscal year 2023”) and September 30, 2024 (“fiscal year 2024”). Pursuant to the award agreement, (i) 179,349 Options shall vest, if at all, in fiscal year 2022, (ii) 269,023 Options shall vest, if at all, in fiscal year 2023, and (iii) 448,371 Options shall vest, if at all, in fiscal year 2024, in each case based upon our achievement of a specified amount of earnings before income taxes in the respective fiscal year. | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | 2022 [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 179,349 | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | 2023 [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 269,023 | ||||
Subsequent Event [Member] | Masateru Higashida, President and CEO [Member] | 2024 [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 448,371 | ||||
Subsequent Event [Member] | New Employees [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 115,000 | ||||
Vesting of shares, description | These options shall vest and become exercisable either (i) in the case of time-based options, as to 1/3 on each anniversary of each employee’s employment start date, or (ii) in the case of the Performance-Based Options, based on either (a) the Company’s achievement of certain performance milestones established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2021, 2022, 2023 and 2024, or (b) the employee’s achievement of certain performance milestones tied to adjusted gross sales established by the Compensation Committee for each fiscal year in the fiscal years ending September 30, 2022, 2023 and 2024. | ||||
Subsequent Event [Member] | New Employees [Member] | Nonqualified Performance-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 92,000 | ||||
Subsequent Event [Member] | New Employees [Member] | Time-based Options [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of stock award granted for common stock | 23,000 |